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The ECB is reincarnation of the Third Reich. All the German dominace is based on full control of the ECB. For the general public it is absolutely shocking why Greek, Cypriot etc. central bank governors vote on the ECB Council exactly as their German Uebermasters order. Completely ignoring their own countries interests. Virtually all other central banks, confronted with a two-year forecast like the ECB’s, would be taking urgent action to ease policy further.

This will not, however, happen at the European Central Bank, or not unless there’s some kind of Damascene conversion between now and next week’s meeting. As things stand, there will be no attempt to impose a negative deposit rate, no quantitative easing, and very likely no credit easing, either.

Yet hope springs eternal, and many market pundits predict otherwise. One reason is remarks this week from Jens Weidmann, the generally uber-hawkish president of the German Bundesbank. To almost universal astonishment, he said he had no particular objection to quantitative easing (QE), though when it comes to using “unconventional measures”, he would prefer negative interest rates.

For Mr Weidmann, there is a distinction to be made between quantitative easing, which would be applied pro rata across all eurozone countries according to share of GDP, and the already announced promise of “outright monetary transactions” (OMTs), a commitment to buy bonds without limit in distressed sovereigns. In Mr Weidmann’s view, the targeted nature of OMT purchases would amount to monetary financing, and would therefore be banned by treaties. But broadly-based QE would not.

This is odd, because only last January Mario Draghi, president of the ECB, seemed to suggest that QE would indeed be illegal because it could be considered monetary financing. OMT purchases, on the other hand, were all about making monetary transmission systems more effective, and were therefore perfectly OK.

Since, then, however, he has cited QE as one of three options for “unconventional measures”. Confused? Not half as much as the ECB.

All this serves to highlight the almost impossibly obstructive constraints under which the ECB operates. It can’t act like a proper central bank, not just because it is answerable to so many masters – which means that any consensus will always fall short of what’s required – but also because the eurozone is not a single economic region, but rather a collection of individual sovereigns.

The result is paralysis, first in the face of financial crisis and now that this has subsided, a clear and present danger of deflation. But please don’t call it deflation.

To the extent that prices, wages and asset values are indeed falling in certain parts of the eurozone, this is not, according to the ECB, deflation, but a “relative price adjustment”, which will eventually make these countries more internally competitive. Unfortunately, it also only further increases the weight of already intolerable debt burdens. To ease this plight, the ECB should actually be running an inflation target of more like 3pc or 4pc, but never mind quantitative easing, there is absolutely no chance of Mr Weidmann agreeing that.

Small wonder that the economic wastelands of southern Europe look so jealously at the monetary conjuring trick of British recovery, and wonder why on earth they ceded the tools to do the same thing. These countries still have notional fiscal autonomy, but without accompanying monetary sovereignty, it means nothing.

Flowers sinned, but it’s the FSA that’s to blame

“I have sinned," the Rev Paul Flowers, the disgraced former chairman of Co-op Bank, bravely confessed this week in an interview with Newsnight’s Jeremy Paxman. He then went on to dismiss sin as an “old-fashioned term” that he would rarely use. Yet one rather more modern excuse which the Methodist minister was prepared to avail himself of was that none of what happened at the bank was really his fault, because he had been positively vetted for the job by the Financial Services Authority. By implication, therefore, the blame lay with the FSA for approving him in the first place.

Breathtaking though it was to hear such an unashamed piece of buck- passing, something similar has actually been par for the course among bankers ever since the financial crisis first erupted. In this upside-down way of looking at the world, it was not banking recklessness or greed that was the main cause of the mischief, but regulatory failure .

What do you expect if you let naughty children run riot? So asks the City. This is the same line of mitigation as that used by the perennial shoplifter; it’s not my fault I was caught stealing, the police should have stopped me.

You cannot entirely blame people for thinking like this, for it is only a natural response to a world ruled by bureaucrats and regulators. Eventually, all sense of personal and institutional responsibility – or conscience, to use what the Rev Flowers would no doubt regard as an old-fashioned term – gets subjugated to the apparent safety net of publicly imposed rules and regulations.

It is for this reason that I have long thought of the crisis not as the result of too little regulation, but too much. Normal market disciplines were surrendered to the altogether less effective authority of all embracing regulation. It was a bad choice. Yet rather than learn the lessons, our response has been only to double up on the regulatory intrusion, further absolving individual accountability and entrenching a rotten system.

In any case, the Rev Flowers claims to have gone through a rigorous process of selection. The FSA had already rejected a number of candidates before alighting on him, he protests. Blimey, could they really have been considering Wagner from The X Factor? But pity the poor Rev Flowers – he was taken “to hell and back” in preparing for his FSA grilling, which seems to have been so tough that his interviewers entirely missed the fact, later exposed by Andrew Tyrie on the Treasury Select Committee, that he had not a clue what the size of the Co-op’s balance sheet was. It is sometimes said of such episodes that you couldn’t make them up. In this case, it seems only too plausible.